N.C. storage market could exceed 1,000 MW, report says

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North Carolina’s energy storage market could grow to more than 1,000 megawatts by 2030, according to a report released by researchers at N.C. State University and N.C. Central University.

The report, mandated by a state law, lays out the ways various storage technologies could be used in the state.

In light of the quickly falling prices for lithium ion batteries, near-term decisions on power plant, transmission and distribution investments should be closely evaluated so they don’t lock out energy storage options that could be more economic in a few years, according to the report, released Tuesday.

The study, “Energy Storage Options for North Carolina,” comes as North Carolina’s solar capacity has grown to about 4,400 MW, placing it second among U.S. states.

“We believe that now is the appropriate time to consider the role that energy storage may play in the state’s future power system,” the report said. “Energy storage can help ensure reliable service, decrease costs to rate payers, and reduce the environmental impacts of electricity production.”

North Carolina has about 1 MW of battery capacity and about 80 ice thermal storage facilities, according to the report. The state also has 185 MW of pumped storage capacity owned by the Tennessee Valley Authority.

Duke Energy also has two large pumped hydro facilities in South Carolina that serve the Carolinas. The Bad Creek project is being expanded from 1,000 MW to 1,400 MW, in part to help balance solar growth in North Carolina, the report said.

Several battery projects are in development in North Carolina, including projects totaling 12 megawatt-hours that will be coupled with solar projects for Brunswick Electric Membership Corp. and a 500-kilowatt storage facility that will be paired with 1 MW of for Fayetteville Public Works Commission, according to the report.

In October, Duke Energy said it plans to spend $500 million on about 300 MW of battery storage in the Carolinas over the next 15 years, the report said.

The report found that lithium-ion batteries, flywheels, pumped storage, compressed air and thermal ice can currently provide various cost-effective services.

Li-ion batteries, for example, can cut coincident peak and time-of-use charges for some commercial and industrial customers, with 2-hour duration batteries yielding the highest benefits, according to the report.

Ice storage is also currently cost-effective for reducing C&I customers’ coincident peak and TOU charges, according to the report. However, combining residential battery storage with rooftop solar is not cost-effective under current rate design.

The researchers found that frequency regulation provides the highest net benefits among the services they studied and represents a key near-term opportunity for storage.

At the distribution level, expected price declines will make Li-ion batteries a cost-effective way to provide peak capacity and peak shaving to defer infrastructure investments, according to the report. Storage can likely be used now to improve the performance on the most problematic distribution circuits, the report said.

Pumped hydro and compressed air energy storage can be used cost-effectively today for bulk energy time shifting and peak shaving, but the technologies are highly constrained by site-specific conditions, the report said.

In contrast, Li-ion batteries are currently too expensive for bulk energy time shifting and peak generation capacity deferral. However, up to 5,000 MW of battery capacity may be cost-effective for time shifting and peak shaving if prices fall as expected, according to the report.

At current costs, it doesn’t make economic sense to use battery storage to make solar facilities more efficient, according to the report. “The relatively flat marginal costs for electricity in North Carolina do not provide significant arbitrage opportunities for batteries to time shift the clipped solar energy,” the report said.

North Carolina could take various steps to promote energy storage, including clarifying utility planning provisions, holding solicitations for storage services, setting storage goals and developing storage incentives, according to the report.